Story highlights

Witness: "There are huge flames, and you can hear the structure falling and the thuds"

Source says the fire began on the 20th floor when curtains inside a residence caught fire

Plumes of smoke billow out from the Address hotel in Dubai hours after a fire began

(CNN)Firefighters battled a blaze that engulfed a luxury hotel in Dubai Thursday night while a spectacular New Year's fireworks display lit up the night sky nearby.

Orange tentacles of flames engulfed a large section of the high-rise Address Downtown Dubai hotel soon after the fire started around 9:30 p.m. (12:30 p.m. ET). Witnesses said they heard explosions as the fire raged.

Hours later, dark plumes of smoke billowed from the building as the fire still appeared to be searing several stories.

Bruce Szczepanski, who watched from the balcony of a nearby hotel, said he could still hear parts of the building crashing to the ground more than nine hours after the blaze began.

"There are huge flames, and you can hear the structure falling and the thuds," he said.

A source told CNN the fire broke out in a residence on the building's 20th floor when curtains caught on fire.

Jaqueline Hurtado, a CNN en Español correspondent, was at a restaurant in the area when she heard an explosion, "like a loud pop." She thought the fireworks display may have started early.

"Then suddenly you saw people screaming and running," she said.

Photos:Dubai hotel fire

Photos:Dubai hotel fire

Firefighters continue to work at the Address hotel in downtown Dubai on Friday, January 1. A massive fire broke out Thursday night at the high-end hotel in the United Arab Emirates' most populous city.

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Photos:Dubai hotel fire

Fireworks light up the night sky near the Address hotel. Despite the fire that started hours earlier, the highly anticipated New Year's Eve festivities went ahead as planned.

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More than a dozen people sustained minor injuries, according to the Twitter account of the Dubai government's media office.

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People watch as flames rip through the hotel Thursday night.

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The incident occurred near the Burj Khalifa, the world's tallest skyscraper.

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The fire started around 9:30 p.m., witnesses said.

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People were gathering to watch New Year's Eve celebrations when the hotel caught on fire.

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Early reports said the fire started on the 20th floor.

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It was not immediately clear what caused the fire.

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The fire broke out as governments around the world were on high alert for possible terrorist attacks tied to New Year's Eve celebrations, but there was no immediate indication that terrorism was to blame for the blaze.

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The Address hotel describes itself as "the premier five-star hotel" in Dubai.

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The nearby hotel, they realized, was on fire. Soon authorities evacuated them from the area.

"The fire was just going so fast," she said. "It just started burning real quick."

At least 16 people were injured, the Dubai government's media office said Thursday night on Twitter.

New Year's fireworks show goes on

But the highly anticipated New Year's Eve festivities in the United Arab Emirates' most populous city -- including what was billed as one of the world's largest fireworks displays -- went ahead as planned. Cheering crowds of onlookers watched as bursts of color filled the sky.

Just a few blocks away, the scene was dramatically different.

CNN Map

At the Address hotel, which describes itself as "the premier five-star hotel" in Dubai, flames appeared to be devouring growing portions of the high-rise, even as government officials said the blaze was largely contained.

Maha Abouelnebin saw what appeared to be a low flame while she was having dinner with her family at the hotel.

Then she realized it was something far more dangerous: a full-blown blaze.

"Immediately we decided we need to get out of there, because we saw debris falling from the building," she told CNN.

Staff efficiently evacuated the hotel, she said. "They got us out calmly... quickly. We were impressed with how easy we got out of there."

Fire sends people running

Soon Hong, who lives in an apartment across from the mall near the Address, said he was setting up his camera near a window to capture the fireworks when he heard something that drew his attention.

"I looked up, and the entire building was in flames," he said. "It took seconds."

Szczepanski was also setting up a camera to take pictures of the fireworks when he saw the blaze break out.

"All of the sudden, you saw the flames, and everyone was focused, running to try to get a better vantage point," he said.

Once the fireworks started, he said, he didn't know where to look.

Address Hotel Facts

Years of construction -- 2005 to 2008

Opened -- October 2008

No. of floors -- 63

Height -- 991 feet

No. of rooms -- 171

No. of suites -- 25

No. of residences -- 626

Restaurants -- 7

"I was torn; do I watch the fireworks, or do I continue to watch the fire?" he said.

'Absolutely horrific'

The fire broke out as governments around the world were on high alert for possible terrorist attacks tied to New Year's Eve celebrations, but there was no immediate indication that terrorism was to blame for the blaze.

Jonathan Gilliam, a CNN law-enforcement analyst, said he was surprised by how fast the fire spread.

"This is looking absolutely horrific," he said. "This is spreading very rapidly."

Dubai is the most populous city in the United Arab Emirates

On its website, the hotel says that its "spacious and bright rooms offer a dynamic sense of style and a striking design that appeals to all tastes across the international travel market."

"Dubai's social scene happens here from our stylish rooms to our unique choice of modern outlets, ideal for everything from a social cup of coffee to our fabulous brunches, exquisite dinners and the best late night venues," the hotel website says.

The government's media office said guests evacuated from the hotel would be provided with new accommodations.